We use a semi structural model to estimate neutral rates in the United States. Our
Bayesian estimation incorporates prior information on the output gap and potential output
(based on a production function approach) and accounts for unconventional monetary
policies at the ZLB by using estimates of 'shadow' policy rates. We find that our
approach provides more plausible results than standard maximum likelihood estimates for
the unobserved variables in the model. Results show a significant trend decline in the
neutral real rate over time, driven only in part by a decline in potential growth whereas
other factors (including excess global savings) matter. Neutral rates likely turned negative
during the Global Financial Crisis and are expected to increase only gradually looking
forward.